Cheese Club

The correct bidding strategy directly depends on the industry of particular company. We find out how the procurement processes are built in the Cheese Club and KOMO companies, from Anatolii Cherednichenko, the director for the procurement of goods, works, and services.

Please Tell Us What the Cheese Club and KOMO Companies Are Today?

The Cheese Club and KOMO companies belong to the cheese business of the "Continuum" companies group. The enterprises produce hard and processed cheese, butter, and dry whey. The plant of the KOMO company is located in the Dubno city, Rivne region, and the Cheese Club, in Kanev, Cherkasy region.

Today KOMO and Cheese Club are leaders on the Ukrainian market in the category of natural cheese. KOMO also occupies a leading position in the processed cheese market in Ukraine. The products are exported to more than 20 countries around the world, including the USA, the Netherlands, the UAE, Denmark, Israel, Pakistan, Jordan, China, Kazakhstan, Uzbekistan, Armenia, Azerbaijan, and Georgia. Both enterprises have modern equipment and produce high-quality products.

Cheese Club

How Is the Procurement Process Going in Your Company Now?

We carry out purchases on-demand, by the annual plan. Our rules stipulate that purchases must take place at least once a year: that is, once a year we must review either contracts, or suppliers, or the terms of purchase, and make the necessary adjustments. We do this because many factors can change in a year, both in our production and in the production of suppliers.

Receiving an application from a procurement initiator, we work through a technical order, look if the application has been drawn up by our rules and regulations and whether it complies with the annual plan. Then we place a purchase announcement on the electronic site. Next, we accept offers from potential suppliers within the time specified in the terms of purchase, analyze the type of activity of the participants, etc.

After we receive the supplier analysis reports, the tender committee begins to consider their proposals. Unfortunately, there are times when offers with the lowest price are not profitable for further cooperation. For example, companies charge a cheap price, thereby dumping everyone else, but in fact, offer lower quality products. All this the tender committee must be able to understand. But in any case, they decide what the result of the auction will be, not independently, but with the participation of the customer: the initiator of the purchase must read all the documents provided by the supplier, and then the final decision on the choice of the winner and further cooperation with him is made.

We try to combine the same purchases for the Cheese Club and KOMO when there is such an opportunity – this allows us to receive more attractive offers from suppliers. When we buy a certain volume of products for only one industry, the price will be higher than when we purchase products for two industries at once. In the second case, suppliers are more willing to offer a lower price for a larger purchase volume.

Have You Had any Misunderstandings with Your Suppliers?

Recently, in the course of cooperation, we encountered one incorrect situation. The supplier announced a price change to us, without any justification, after 10 days of work under a new contract. The price of this product is approved at the legislative level, and it is stated in our contract that it can only change in case of changes in legislation. But the supplier decided to raise the price at his discretion.

Do You Have Plans to Change the Main Suppliers?

We plan to review only those contracts that have expired, as defined by our internal procurement regulations. We have an important reason not to change suppliers – the production of dairy products has a narrow range of consumer materials with which we work. Accordingly, our main suppliers already have the necessary groundwork for cooperation with us.

For example, it can be a special mold for making boxes: the old supplier already has it, while the new one will need to order it from scratch, which will cost additional costs. Therefore, we always assess whether it will be beneficial for us to start cooperation with a new supplier. If he offers a price that will cover the additional costs, we can consider his offer.

What Results Did You Get When You Transition to the Electronic Trades?

Economically, we have received a significant effect from this transition. But of course, it happens that the tender offer has pitfalls. As I have already said, not always a favorable price of goods precedes fruitful cooperation. Sometimes suppliers in a proposal write one thing, but in fact, offer something completely different. For example, we want to buy "sausage", and the supplier offers us a "meat product" instead.

According to the procurement rules, we must prescribe what exactly we want to purchase, but at the same time, we have no right to indicate a specific seller. Against this background, misunderstandings between the customer and suppliers can arise. But the ability to choose the right products comes with experience.

I have a lot of experience working with electronic trading. I worked with them from the very beginning of their inception, while still being an employee of another large company – we did a lot of purchases. And since the company was state-owned, we are obliged to comply with all the provisions of the Law "On Public Procurement". Thanks to that experience, now I can effectively consider commercial offers and analyze what suits the initiator of the purchase and what does not.

Summing up, I can confidently say that electronic trading gives us three main advantages:

- real cost savings;
- wide range of potential suppliers;
- the opportunity to get an alternative supplier if the main one has any problems in production.

Cheese Club

Why Did You Choose SmartTender.biz when Choosing a Site, and what Improvements Were Implemented Specifically for Your Company?

When choosing an electronic platform, we relied on its convenience and functionality. We chose SmartTender.biz because today its tools are enough to perform all our tasks related to procurement processes. In particular, I want to note two of its advantages:

1. The ability to see in one open window a large amount of useful information about open procurement procedures.
2. Comparative table of the proposed commercial proposals – its use greatly simplifies the work of the tender committee and reduces the time for analyzing the proposals of the participants.

In general, the SmartTender.biz platform is very convenient, and we are completely satisfied with our cooperation.

What Qualities, in Your Opinion, Should a Modern Purchaser Have for Effective Work?

For successful work, a purchaser needs to be able to work with suppliers and build correct communication with them, as well as analyze offers and immediately reject those that do not meet the terms of purchase.

It is also important to be able to work with the state classifier – it is by the product code that potential suppliers can find you, and for them, this value can become decisive in the issue of submitting or not submitting an offer.

And of course, you need to be able to coordinate the work of subordinates – it depends on how efficiently your procurement team will work.