Introduction: Any greenfield/brownfield project starts with civil works – from land preparation to RCC constructions which includes buildings and equipment foundations. Executing civil works on-site in a timely, safe and cost-effective manner defines the project’s success. Are you selecting the right civil contractor to execute such a crucial activity? Discover how Venwiz leverages technology to navigate through and assess hundreds of civil contractors in the market and help you choose the most suitable contractor as per your project’s needs.
Abstract: Civil works in industrial projects encounter frequent delays and unforeseen complications due to many reasons. While the project team’s time and energy are mostly spent on solving the execution level delays (post-purchase order), not enough focus and attention is given to objectively selecting the best suitable contractor to whom the PO will be awarded. Choosing a contractor subjectively based on familiarity, recommendation or the contractor’s legacy with the company can be a costly mistake and impact the entire project.
Converting subjective selection criteria into objective criteria and following a well-defined, systematic assessment process can minimise the risk of cost escalations and project delays. Objective vendor assessment requires gathering a lot of intelligence (data) about the vendor’s capabilities – technical, financial and compliance, gathering their detailed offerings (quotations), and analysing and comparing this data. A 360-degree assessment process to select the right vendor can sound cumbersome if done manually but with the right digital tools like Venwiz, the entire vendor selection process can be done seamlessly saving time and effort for the project teams. Of course, the benefits accrued due to a prudent selection of the right vendor are manifold.
Transforming Procurement Challenges into Project Wins with Venwiz
Vinayaka Pvt. Ltd. faced substantial procurement hurdles during its greenfield project in Maharashtra. With a fixed budget and deadline, the company required a qualified civil contractor promptly. Initial online research yielded numerous potential vendors, but critical information on reliability, capabilities, and financial health was scarce.
Vendor response times were inconsistent, impeding timely decision-making. Comparing quotes was challenging due to varying formats, rate structures, and line items, making cost analysis difficult. Hidden costs further complicate the process of selecting and managing vendors efficiently.
To address these issues, Vinayaka implemented the Venwiz platform. The following sections outline how Venwiz mitigated these procurement challenges and contributed to project success.
Project Flow at Venwiz
Every project begins with a well-defined scope or project description. For Vinayaka’s project, this included extensive civil work such as multiple large diameter RCC tanks (>15 m dia), rectangular RCC tanks, equipment foundations, factory buildings, road and other utility construction. The project budget was INR 25 Crores, with a planned start date of December 2023.
Venwiz implemented a structured approach to address Vinayaka’s vendor selection challenges.
Table of content
- Stage 1: Understanding the RFQs and its nuances
- Stage 1: Understanding the RFQs and its nuances
- Stage 2: Use of PQR for precise Vendor Discovery
- Stage 3 – Simplifying Vendor Selection with Smart Match AI Algorithm
- Stage 4: Vendor Evaluation & Shortlisting
- Stage 5: Comprehensive Vendor Intelligence for Project Success
- Stage 6: Optimising Cost Estimation for Transparent Project Pricing
- Stage 7: Comparing Vendor Quotes with Venwiz Cost Estimate
- Stage 8: Efficient Negotiation Support
- Time and Budgetary Savings with Venwiz
- Beyond the PO Award: Value-Added Services for Winning Vendors
- Proven Success
- Conclusion
Venwiz’s engagement with Vinayaka began when we received their Request For Quotation (RFQ). Venwiz’s Customer Success team (CS team) collaborated closely with Vinyaka to gather comprehensive project information, including Bill of Quantities (BoQ), technical drawings, and site conditions.
A CS team member visited the site to assess local conditions like availability of raw materials, utilities, labour, and accessibility. This information was incorporated into a detailed report, providing potential vendors with a clear understanding of project requirements and site-specific challenges.
To ensure effective project traceability, Venwiz assigned a unique project number JRxxxx and a dedicated CS executive served as the primary point of contact for Vinayaka.
Stage 2: Use of PQR for precise Vendor Discovery
A Pre-Qualification Requirements (PQR) document outlines the essential criteria vendors must meet to qualify for a project bid. Venwiz worked closely with Vinayaka to develop a comprehensive PQR, forming the foundation for successful vendor selection.
By defining clear technical and commercial qualifications, the PQR helps streamline the communication process. This focused approach optimised Vinayaka’s time and eliminated unqualified vendors. The PQR also communicated project expectations to potential vendors, minimising clarification requests and ensuring accurate initial proposals.
Vinayaka had a specific requirement for constructing a large-diameter RCC tank. We incorporated this specific requirement into the PQR, guaranteeing that shortlisted vendors had proven expertise in this specialised area.
Stage 3 – Simplifying Vendor Selection with Smart Match AI Algorithm
We use our proprietary algorithm to search through a vast database of vendors across India, identifying potential candidates based on the project’s specific requirements as outlined in the PQR. This advanced search capability extends beyond our existing database of 25,000+ vendors, accessing a wider pool of potential suppliers.
Job Broadcasting: The platform sends a job broadcast to potential vendors with all relevant project documentation – RFQs, BOQs, technical drawings, project reports, and other critical information. This approach ensures the vendors have all the necessary information to prepare precise quotations. The job flow enables automated reminders, tracking and communication between the vendor, Venwiz, and the client in real-time.
Open Communication: Venwiz fosters open communication between Vinayaka and the vendors. By enabling direct interaction, vendors could ask for clarification or address uncertainties. This approach accelerated the quoting process by minimising revisions and ensuring the initial quote accurately reflected the project scope.
Stage 4: Vendor Evaluation & Shortlisting
Following the initial PQR assessment, Venwiz conducted a comprehensive evaluation of shortlisted vendors using a structured comparison methodology. Key evaluation criteria included the vendor’s track record in executing similar projects, financial stability, project location, and overall experience. Vendors were scored across these parameters on a scale of 1-5, with the final score determining their ranking.
This rigorous analysis resulted in a shortlist of vendors that demonstrated exceptional capabilities and alignment with Vinayaka’s project objectives. We generated detailed evaluation reports were generated to support informed decision-making.
Stage 5: Comprehensive Vendor Intelligence for Project Success
Venwiz focuses on identifying the most suitable vendor rather than prioritising costs. We conducted a detailed analysis of shortlisted vendors, evaluating their organizational structure, technical expertise, resource allocation, project history, and financial stability.
Key assessment areas included:
- Technical Alignment: Evaluating vendor capabilities to meet specific project requirements, such as constructing large-diameter RCC tanks.
- Performance Verification: Validating vendor references and past project performance through client interactions and reviewing project data.
- Local Market Advantage: Prioritising vendors with regional expertise to optimise resource utilisation and project execution.
- Financial Stability: Assessing vendor financial health to mitigate potential risks during the project lifecycle.
This rigorous evaluation ensured that all shortlisted vendors possessed the qualifications to successfully execute Vinayaka’s project.
Stage 6: Optimising Cost Estimation for Transparent Project Pricing
Accurate cost estimation is crucial for project success. Venwiz employs a robust cost estimation system to establish internal benchmarks and compare vendor quotes. We use:–
- Industry Standards: Established market benchmarks ensure standardisation of pricing.
- Market Rates: Real-time data on material and labour costs provide a dynamic pricing framework.
- Local considerations: Local factors influencing the project are considered.
- Expert Feedback: Input from civil engineering specialists informs cost projections for niche works.
To ensure fair and accurate cost comparisons, Venwiz standardizes material specifications, including makes for commonly used items like plumbing, windows, flooring, and paint. By aligning these specifications with the Bill of Quantities (BoQs), we create a level playing field for all vendors. In cases where BoQs needed more specific material details, Venwiz clarified these requirements to maintain consistency across vendor proposals.
This approach promotes transparency and enables vendors to submit optimized quotes based on a clear understanding of project requirements.
Stage 7: Comparing Vendor Quotes with Venwiz Cost Estimate
Venwiz compared vendor quotes against internal cost estimates to ensure market alignment. We analyzed significant cost discrepancies to identify underlying factors, such as interest rates or input costs.
To support vendors and promote competitive pricing, Venwiz offered:
- Financial Assistance: Exploring working capital solutions through ProFinance.
- Sourcing Support: Identifying cost-effective material procurement options through ProSource.
This collaborative approach fostered strong vendor relationships while securing optimal pricing for Vinayaka. We presented the final shortlisted vendors to Vinayaka for further evaluation and negotiation.
Stage 8: Efficient Negotiation Support
Venwiz presented Vinayaka with a shortlist of qualified vendors and their corresponding quotes for final consideration and negotiation. Throughout this phase, Venwiz played a pivotal role in supporting both parties.
Key contributions included:
- Informed Decision Making: Providing comprehensive vendor reports and quote comparisons to support Vinayaka’s decision-making process.
- Facilitated Communication: Acting as a communication bridge between Vinayaka and shortlisted vendors to ensure efficient information exchange.
- Scope Management: Tracking scope changes and assisting vendors in updating quotes to maintain alignment with project requirements.
Through collaborative negotiations, Venwiz secured a contract with Natraj Developers at ₹22.5 crores, achieving a remarkable 10% cost savings compared to the initial budget. Beyond direct cost reductions, Vinayaka also benefited from significant time and resource savings by leveraging Venwiz’s expertise.
Vinayaka expressed satisfaction with the shortlisted vendors, the transparent procurement process, and the substantial cost savings realised. The company commended Venwiz for its efficient project management throughout the vendor selection.
Time and Budgetary Savings with Venwiz
| Stage | Traditional Way | The Venwiz Way | Benefits to the clients |
|---|---|---|---|
| Stage 1: Navigating RFQs for Precise Project Execution | Documents are dumped on the vendors without any comprehensive understanding of the project. | Documents are dumped on the vendors. A comprehensive understanding of the project and local conditions along with a job summary is given to the vendors. Venwiz team helps the vendor understand the job better and address any of their queries. | Documents are dumped on the vendors. A comprehensive understanding of the project and local conditions along with job summary is given to the vendors. Venwiz team helps the vendor understand the job better and address any of their queries. |
| Stage 2: Use of PQR for precise Vendor Discovery | Most businesses do not use the PQR method, missing out on its benefits. | Venwiz employs the PQR method to enhance the vendor selection process, leading to superior vendor quality, and resulting in better project outcomes. | The vendors are scouted and selected w.r.t. the objective conditions of the PQR. Any subjectivity in the vendor’s capability assessment is eliminated. |
| Stage 3: Simplifying Vendor Selection with Smart Match AI Algorithm | Organizations often have very few vendors in their database and rely on past vendors, historical information and personal preferences. | Venwiz uses a Smart Match AI Algorithm to select the best vendors in the most objective way from the entire vendor universe, without encouraging any personal preferences. | The scale of vendor search has increased multifold. The combination of PQR and the ability to scan through the entire vendor universe brings in the best relevant vendors for the project. Best vendor selection provides the best project outcome in terms of quality, cost and timeline. |
| Stage 4: Vendor comparison and shortlisting | Most organizations do not conduct structured vendor comparisons and evaluations. | Venwiz conducts a thorough financial evaluation of vendors w.r.t. the job value, payment conditions, and timeline. | Vendors are evaluated w.r.t. a structured and objective process, thus any subjectivity in vendor selection is eliminated. |
| Stage 5: Comprehensive Vendor Intelligence for Project Success | Very few financial aspects of vendors are evaluated by clients. | Venwiz team and their in-house developed tool use current market rates and benchmark data for accurate cost estimation. | Financial evaluation eliminates the risk factor of vendors not being able to mobilize resources during project execution due to cash flow/ working capital issues. |
| Stage 6: Optimizing Cost Estimation for Transparent Project Pricing | The in-house team often struggles with current market rates and benchmark data. | Venwiz team and their in-house developed tool uses current market rates and benchmark data for accurate cost estimation. | The internal estimate helps Venwiz to assess the quoted rates and pre-negotiate with the vendors before they submit the quotes to the client. Clients get the best possible rates from the vendors and save time on such activities. |
| Stage 7: Comparing Vendor Quotes with Venwiz Cost Estimate | Quotes are compared at a very high level, missing detailed analysis. | Venwiz ensures a detailed comparison of vendor quotes with project cost estimates. | Clients get the benchmark for vendor negotiations. |
| Stage 8: Efficient Negotiation Support | Traditional negotiations often lack efficiency, leading to missed opportunities for cost savings. | Venwiz’s process facilitates focused discussions between the client and vendors, resulting in significant time and bandwidth savings for both parties. | Venwiz increases the bandwidth of the client’s procurement teams and accelerates the closure of the procurement process. |
Beyond the PO Award: Value-Added Services for Winning Vendors
Venwiz believes in making the ‘Project Successful’ and hence stays connected with the vendor and the client till the project is completed. Venwiz understands that during the long tenure of the project lifecycle, the vendors may face issues with sourcing materials, finance or sub-contracting services efficiently and on time. Hence, Venwiz offers the following suite of VAS to all the vendors for their project execution.
Proven Success
Our platform fosters a mutually beneficial relationship between clients and vendors. Clients enjoy accelerated project timelines, reduced costs, and access to a qualified vendor pool. By streamlining the procurement process, we empower clients to focus on core competencies. On the vendor side, we provide increased visibility, access to new projects, and efficient payment processing. By optimizing operations, vendors can enhance profitability and expand their customer base. This collaborative approach drives success for all stakeholders.
Conclusion
Venwiz transformed civil project procurement Our data-driven platform has accelerated vendor discovery and procurement by 10-12%. Our proprietary algorithms streamline vendor discovery and selection, accelerating project timelines by a verified 10-12%. By systematically addressing industry-wide procurement challenges, Venwiz transforms inefficiencies into strategic advantages.
The successful execution of Vinayaka Pvt. Ltd.’s greenfield project in Maharashtra, exemplifies our capabilities. Our platform’s automation of RFQ processes, rigorous application of PQRs, and advanced data analytics ensure precision in procurement and project execution. Through granular analysis of vendor quotations, we empower clients to make informed decisions and optimize costs. Our in-house Center of Excellence provides unparalleled expertise in cost estimation, aligning with industry best practices.
Venwiz is not merely a tool; it’s a strategic partner that drives project success.
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