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Construction : Interaction | November 2015 | Source : Equipment India

We dont generally procure used equipment

YSP Murty, Chief General Manager - P&M, NCC.

We expect good business in the road sector and buildings, so that in near future we have to go for road equipment and construction equipment like batching plants, says YSP Murty, Chief General Manager - P&M, NCC.

What is the equipment selection procedure in your company?
We call for quotes from different companies and based on technical evaluation by our mechanical section, we do recommend for which type of equipment we should go for. This is based on 3-4 major factors: after sales service, performance parameters available in the market and pricing.

What are the safety features being considered specially while selecting heavy machinery?
Safety is always one of the factors which one needs to take a call for.

What are the important features you look for in an equipment?
The machines which we select should be operative with best performance. Safety of utmost importance. For eg, if a road equipment is being operated, the surrounding should be safe and the operator should also feel safe to operate that machine.

What are the categories, types and brands of construction equipment which you are responsible for?
For construction building sites, right from batching plant, transit mixers, boom placers, to concrete pumps (if it is high rise building, higher range of concrete pumps), and tower cranes. For road projects, the equipment vary like hot mix plants, crushing and WMM plants, pavers and rollers. In power projects, higher capacity cranes of up to 250 tonne and may be on certain occasion up to 400 tonne capacity would be required. These cranes are used in the installation of bigger boilers and other components.

What are the prime considerations for equipment selection? Are you country specific?
I am not against of Chinese equipment but one factor which makes me to feel for Chinese products is the standardisation. Selection should be done with respect to the area where equipment are broadly available in India and space availability also should be there. Equipment downtime should be less and service components should be available like Chinese equipment. Availability of spare parts should be readily available for which enough dealers and support system should be there to reduce downtime.

Do you procure new or used or both categories of equipment?
We take a call inhouse and normally we go for new. We don´t go for procuring used equipment.

Do you conduct any rent versus buy analysis?
Definitely we do. This will depend on what period for which the equipment is required. If it is for a shorter period, then we go for rental.

What are your preferred brands of equipments in various categories?
We like to standardise our own company´s equipment and not to have various types of categories.

We look at only major leading brands: Pavers - Wirtgen and Gujarat Apollo; PTR - Dynapac or Volvo; Tandem roller - Volvo or Wirtgen; Soil compactors - Escorts or Case; Concrete batching plant - Schwing Stetter; Concrete pump - Schwing Stetter (we are also looking at Putzmeister for concrete equipment as their performance is reported to be good); Tower cranes - Zoomlion or Escorts and some others; and Heavy cranes - Liebherr and one Chinese crane.

What is the importance of total life cycle cost and total cost of ownership?
Life cycle cost is an important aspect. We also consider the returns on operating the equipment. We buy an equipment anticipating certain output and we do not entertain high maintenance cost and believe in standard norms for the same. So that our cost reduces, operation cost comes down and profit increases.

Do you give weightage for extra acquisition cost when supplier is giving you new technology, performance enhancing features, Telematics, energy conservation and degeneration features and such other sophisticated items?
Yes, definitely we take a call on modern equipment and we don´t hesitate to bring those technologies in any equipment.

To what percentage extent are you willing to pay extra price for that? We are willing to pay 10-15 per cent more.

Do you have any tie ups with OEMs for operator training?
Currently we don´t have such tie-ups. We have taken a step with Tata Motors for plants and other things but we are yet to finalise it.

Could you elaborate from procurement perspective that what is the process in your company? What is the hierarchy and how the decision is made?
In our company, the first requirement comes to purchase department. They take up the requirement details and invite quotes from different suppliers. Then based on all technical parameters they put technical details to mechanical plant and machinery region and based on the requirement for performance and function, we take a call which type of equipment is to be considered.

What is the guarantee you seek from equipment suppliers?
For any engine, minimum guarantee should be for two years for 3,600-4,000 operations. For equipment, definitely one year of minimum 2,400 hours warranty should be there. It should be extendable as well.

From procurement perspective, do you also seek guarantee for after sales maintenance response, retrofit repairs, consumables, etc?
Performance wise, at the time of placing order, we do mention that equipment should work with 90-95 per cent availability for next two years. They abide with those conditions and show us results.

Do you procure consumables also from original equipment manufacturer or you go to local market and procure these items?
Unless the company comes out by its own high standards, we take a call as they give certain guarantee. Normally such items are taken from local market. But if the company comes with particular specifications, definitely we do take a call for taking such high standard items and we check what is the life. If it is better than operational cost then definitely we take it too.

In your purchase contracts, are there any non negotiable terms?
Payment terms and performance guarantee come under this.

What are the challenges in procurement?
Challenge in procurement is the competitive world. There are many big brands available so that it becomes difficult to choose. Of course, we select one type of equipment from one company but we cannot even stick to the same because again monopoly comes into picture. So normally, referring to brand image, if a really good brand is coming in the third variant, we try to induct the same in our system.

What is the total size of your equipment fleet?
It is about Rs 550 crore in value terms for machinery available.

What are your projections for procurement during the next 2-3 years?
We are expecting some good business in the road sector and buildings. So definitely in near future we have to go for road equipment and construction equipments like batching plants.

Any other information you would like to share?
In the present competitive world, we have to keep ourselves tight in all corners maintaining our operational cost so that our profit increases.

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