MMK Purchases Director Becomes Director of The Year

22 May 2019 (09:24)

UrBC, Yekaterinburg, May 22, 2019. Head of Magnitogorsk Iron & Steel Works (MMK) Category Purchases Department Pavel Vasev is now Purchases Director of the Year 2019.

According to MMK’s Information & PR Department, the large-scale changes introduced in the company’s purchasing practices resulted in a much more efficient supply chain for MMK.

‘This isn’t the first time MMK’s purchasing practices get assessed so highly by the expert community. The plant won the annual all-Russian Competitive Purchases Leader contest several times before. For one, MMK got the Best Project on Business Process Upgrades in Purchasing Award last year. The project in question brought about some major organizational and structural changes in MMK’s supply schemes and enabled a new, category-based, approach to selecting a suitable supplier,’ the company says.

For example, this year the category-based strategies have been applied to the so-called ‘small purchases’: metal goods, tools, pipeline fittings, building materials, electrical equipment, office supplies, cleaning appliances, and white goods that get selected from a large supplier’s catalog or at a supplier’s online store.

The idea behind the new approach is to sign contracts with suppliers and agree on corporate discounts beforehand. The production departments then select items from the range of products the supplier has to offer and place their order at once. This makes any preliminary discussion of technicalities unnecessary, cuts down drastically on transaction costs, and makes the entire purchasing process much speedier. Thanks to this category-based approach, the number of auctions MMK had to coordinate to buy electrical equipment, IT appliances, and measuring devices dropped from 1,437 in 2017 to 1,308 in 2018. No more than 450 auctions are expected to take place this year, which means the overall number will drop by three times in three years.

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