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Online Private Procurement Solution for a largest shipping company in the world
Summary
The customer is the shipping arm of one of the largest companies in the world (Fortune global rank 6), with 2000 revenues of $118 Billion. It needed to purchase fuel at various ports from authorized suppliers.
Challenge
The need to create an online private procurement solution for such purchases from the buyer and its suppliers was felt.
In the world of shipping, the process of supplying fuel to a ship is called bunkering. A ship arranges with a supplier to fuel up at a port. As a large ship cannot get very close to the shore, a smaller barge fills up with the fuel and goes to the ship for the fuelling. The timely supply of this fuel is critical, as any delays can translate to huge demurrage charges (a fine paid for overstaying at the port) for the ship.
With an online private procurement system, the buyer could log in and create a requirement for bunkering at various ports. Suppliers could see the details of the request and submit a bid for various types of fuel required in that request. The bid would be awarded to the supplier with the best price. This would greatly simplify the paper-based process of getting a best bid and provide for more accurate clearing, invoicing and fulfillment. The ROI for the application was extremely high.
Solution
The client chose Calsoft's MarketServer to automate the process of contacting suppliers to receive bunkering quotes. calsoft' experience with energy implementations, its advanced auction engine powered by the marketserver and its 100% open technology composition were key factors.
The core bidding process could be accessed in two ways – a reverse auction or a reverse open bid (similar to an RFQ situation). Auction durations were to be non-configurable and the auction process itself was constructed to allow for quick bidding, breaking ties between supplier bids (with extended phases) and event-driven notifications.
To facilitate the core bidding process, a number of supporting features were required to manage the supplier interaction. Some of these were:
- Counterpart preferences – where preferred suppliers for various ports could be selected. This port-wise granularity was very important to the client's business.
- Ability to provide weightages to suppliers – for instance, if a certain supplier is generally late in his payments, his bid could be discounted by $1/MT.
- Ability to provide credit limits to suppliers
Apart from these core features, many other features like custom reporting, ability to conduct a live discussion with customer service representatives and various kinds of notifications were included in the solution.
Using the MarketServer, calsoft was able to deliver a high impact solution in the space of 30 days. The bunkering site was designed to be highly secure, massively scaleable, and highly customized to the bunkering scenario. This was possible due to the benefits provided by the MarketServer and the ease with which it could be integrated.
Technology
This solution was a Windows DNA implementation of the MarketServer. XML was used extensively in the implementation to provide for communication and interoperability. All code customized or generated by the MarketServer was in ASP and Visual basic COM components, running SQL server as the database. This solution was developed on Windows NT 4.0 and allows for several high security constructs like SecureID or Digital certificates, to be integrated. The solution is designed to be hosted in a secure data center as a Web Farm with Load Balancing and Clustering to provide maximum availability and redundancy.