Phase 3: Procurement Strategy Templates
Equipment Acquisition Framework
1. Supplier Identification & Categorization
A. Primary Equipment Manufacturers Matrix
Tractors (100 units):
Manufacturer | Market Share | Strengths | Weaknesses | Tamil Nadu Presence
------------------|--------------|--------------------|--------------------|-------------------
Mahindra & Mahindra| 35% | Service network | Premium pricing | Excellent (Chennai plant)
TAFE Motors | 25% | Quality, technology | Limited models | Strong (Chennai HQ)
Sonalika/ITL | 15% | Value pricing | Service gaps | Growing
John Deere | 10% | Technology, quality | High cost | Limited
Escorts Kubota | 8% | Innovation | New market entry | Developing
Others | 7% | Niche players | Limited scale | Variable
Harvesters (30 units):
Manufacturer | Market Share | Strengths | Weaknesses | Local Support
------------------|--------------|--------------------|--------------------|----------------
Mahindra Swaraj | 30% | Reliability | Limited innovation | Strong
TAFE/Massey | 25% | Technology | High cost | Good
Preet Agro | 20% | Value engineering | Quality concerns | Moderate
John Deere | 15% | Premium quality | Very expensive | Limited
Class/CNH | 10% | Advanced features | Service network | Weak
JCBs/Backhoe Loaders (30 units):
Manufacturer | Market Share | Strengths | Weaknesses | India Operations
------------------|--------------|--------------------|--------------------|------------------
JCB India | 60% | Brand, reliability | Premium pricing | Excellent (Ballabgarh)
Caterpillar | 15% | Heavy duty | Very expensive | Limited
L&T-Komatsu | 10% | Technology | Service network | Growing
Escorts/JCB | 8% | Local assembly | Limited models | Good
Others | 7% | Regional players | Quality varies | Variable
Agricultural Drones (15 units):
Manufacturer | Technology | Price Range (₹) | Certification | Support Quality
------------------|---------------|-------------------|-------------------|----------------
IoTech (Agribot) | Advanced | 3,50,000-4,50,000 | DGCA certified | Excellent
DJI Agriculture | Premium | 4,00,000-6,00,000 | International | Good
Garuda Aerospace | Good | 2,50,000-3,50,000 | DGCA certified | Moderate
Marut Drones | Basic | 2,00,000-3,00,000 | DGCA certified | Basic
BharatRohan | Specialized | 3,00,000-4,00,000 | DGCA certified | Good
2. Request for Quotation (RFQ) Templates
A. Master RFQ Template
Document Header:
REQUEST FOR QUOTATION
Project: OX Agry Fleet Expansion - Palani Market Capture
RFQ Number: OX-FE-2025-[Sequence]
Issue Date: [Date]
Response Deadline: [Date + 21 days]
Contact: [Procurement Manager Details]
Equipment Specifications Template:
Tractors RFQ (60 units - 50-75 HP + 40 units - 75-100 HP):
SECTION A: GENERAL REQUIREMENTS
1. Quantity Required:
- 50-75 HP Category: 60 units
- 75-100 HP Category: 40 units
- Total: 100 units
2. Delivery Schedule:
- Batch 1 (40 units): Month 1-2
- Batch 2 (35 units): Month 2-3
- Batch 3 (25 units): Month 3-4
3. Delivery Location:
OX Agry Facility, Palani, Tamil Nadu - 624601
SECTION B: TECHNICAL SPECIFICATIONS
50-75 HP Tractors (60 units):
□ Engine Power: 50-75 HP, 4-cylinder diesel
□ Transmission: 8+2 or 9+3 gear system
□ PTO: 540/540E RPM, rear mounted
□ Hydraulics: 1800+ kg lift capacity
□ Drive: 4WD capability preferred
□ Fuel Tank: 60+ liters capacity
□ Warranty: Minimum 2 years comprehensive
□ Certification: CMVR compliance, Pollution norms
75-100 HP Tractors (40 units):
□ Engine Power: 75-100 HP, 4-cylinder diesel
□ Transmission: 12+3 or 16+4 gear system
□ PTO: 540/1000 RPM, rear mounted
□ Hydraulics: 2200+ kg lift capacity
□ Drive: 4WD standard
□ Fuel Tank: 80+ liters capacity
□ Warranty: Minimum 2 years comprehensive
□ Advanced Features: Power steering, comfortable cabin
SECTION C: COMMERCIAL TERMS
1. Pricing Structure:
Base Price per unit (50-75 HP): ₹_______
Base Price per unit (75-100 HP): ₹_______
2. Volume Discounts:
Discount for 100+ units: _____%
Additional incentives: _______
3. Payment Terms:
Advance payment: _____%
On delivery: _____%
Credit period: _____ days
4. After-Sales Support:
Service network coverage: _______
Parts availability guarantee: _______
Technician training included: Yes/No
5. Financing Options:
Interest rate offered: _____%
Loan tenure: _____ years
Processing charges: ₹_______
SECTION D: EVALUATION CRITERIA
Technical Compliance: 40%
Commercial Attractiveness: 35%
After-Sales Support: 15%
Delivery Capability: 10%
Harvesters RFQ (30 units):
SECTION A: EQUIPMENT SPECIFICATIONS
Combine Harvesters (30 units):
□ Cutting Width: 3.5-4.0 meters
□ Engine Power: 75-100 HP
□ Grain Tank: 1000+ liters capacity
□ Threshing System: Axial flow preferred
□ Suitable Crops: Paddy, wheat, maize
□ Ground Clearance: 300+ mm
□ Transmission: Hydrostatic preferred
□ Cabin: Enclosed with AC option
□ Warranty: 2 years comprehensive
SECTION B: COMMERCIAL REQUIREMENTS
1. Target Price Range: ₹18-25 lakhs per unit
2. Volume Discount Expectation: 20%+
3. Demonstration: Field trial mandatory
4. Training: Operator training included
5. Spare Parts: 3-year availability guarantee
JCB RFQ (30 units):
SECTION A: BACKHOE LOADER SPECIFICATIONS
JCB/Backhoe Loaders (30 units):
□ Engine Power: 75-90 HP
□ Operating Weight: 7500-8500 kg
□ Loader Bucket: 1.0 cubic meter
□ Backhoe Reach: 5.7+ meters
□ Dig Depth: 4.3+ meters
□ Transmission: 4WD, powershift
□ Hydraulics: Load sensing
□ Cabin: ROPS/FOPS certified
□ Warranty: 3 years/3000 hours
SECTION B: COMMERCIAL TERMS
1. Target Investment: ₹45 Crores total
2. Expected Unit Price: ₹12-15 lakhs
3. Volume Discount: 18%+ expected
4. Delivery: 4 months maximum
5. Buyback Option: After 5 years
Drone RFQ (15 units):
SECTION A: AGRICULTURAL DRONE SPECIFICATIONS
Agriculture Spray Drones (15 units):
□ Tank Capacity: 16-20 liters
□ Flight Time: 12-15 minutes loaded
□ Spray Coverage: 8-10 acres/hour
□ GPS Accuracy: RTK level precision
□ Obstacle Avoidance: Radar/sensor based
□ Controller: Handheld with display
□ Certification: DGCA Type approved
□ Warranty: 2 years comprehensive
□ Training: Pilot certification included
SECTION B: SUPPORT REQUIREMENTS
1. Training Package: 5 pilots certified
2. Maintenance Support: Local service center
3. Software Updates: 3 years included
4. Spare Parts: Immediate availability
5. Insurance: Coverage assistance
3. Supplier Evaluation Framework
A. Comprehensive Scoring Matrix
Evaluation Criteria | Weight | Scoring Method | Max Points
---------------------------------|--------|-----------------------|-----------
TECHNICAL COMPLIANCE (40%) | | |
- Specification adherence | 15% | Binary + deviation | 150
- Quality certifications | 10% | Standard compliance | 100
- Technology features | 10% | Feature comparison | 100
- Reliability track record | 5% | Reference checks | 50
COMMERCIAL ATTRACTIVENESS (35%) | | |
- Base pricing competitiveness | 15% | Price ranking | 150
- Volume discount offered | 10% | Discount percentage | 100
- Payment terms flexibility | 5% | Terms comparison | 50
- Total cost of ownership | 5% | TCO calculation | 50
AFTER-SALES SUPPORT (15%) | | |
- Service network presence | 7% | Coverage assessment | 70
- Parts availability guarantee | 4% | SLA commitment | 40
- Technical support quality | 4% | Reference feedback | 40
DELIVERY CAPABILITY (10%) | | |
- Delivery timeline commitment | 5% | Schedule adherence | 50
- Manufacturing capacity | 3% | Capacity assessment | 30
- Supply chain reliability | 2% | Track record | 20
TOTAL SCORE | 100% | | 1000
B. Detailed Scoring Guidelines
Technical Compliance Scoring:
Specification Adherence (150 points):
- 100% compliance: 150 points
- 95-99% compliance: 120 points
- 90-94% compliance: 90 points
- 85-89% compliance: 60 points
- <85% compliance: Disqualified
Quality Certifications (100 points):
- ISO 9001 + Industry specific: 100 points
- ISO 9001 only: 70 points
- Industry certification only: 50 points
- No certification: 0 points
Technology Features (100 points):
- Advanced features (GPS, automation): 100 points
- Standard features + some advanced: 75 points
- All standard features: 50 points
- Basic features only: 25 points
Commercial Scoring:
Volume Discount Assessment (100 points):
- >25% discount: 100 points
- 20-25% discount: 80 points
- 15-20% discount: 60 points
- 10-15% discount: 40 points
- <10% discount: 20 points
Payment Terms (50 points):
- 90+ days credit: 50 points
- 60-90 days credit: 40 points
- 30-60 days credit: 30 points
- 15-30 days credit: 20 points
- Advance payment required: 10 points
4. Negotiation Strategy Playbook
A. Pre-Negotiation Preparation
Information Gathering Checklist:
Supplier Intelligence:
□ Recent financial performance
□ Current inventory levels
□ Production capacity utilization
□ Competitive pressure points
□ Previous large deals structure
□ Key decision makers identification
□ Supplier's strategic priorities
Market Intelligence:
□ Industry capacity utilization
□ Raw material cost trends
□ Competitor pricing benchmarks
□ Seasonal demand patterns
□ Government policy impacts
□ Technology disruption factors
Negotiation Authority Matrix:
Decision Level | Authority Scope | Approval Required
---------------------|---------------------------|------------------
Procurement Manager | <5% price variance | None
Operations Head | 5-10% variance | GM approval
General Manager | 10-20% variance | Board approval
Board Decision | >20% variance | Full board vote
B. Negotiation Tactics by Equipment Type
Tractor Negotiations:
Opening Position:
- Target: 25% bulk discount
- Minimum acceptable: 20% discount
- Payment: 50% advance, 50% on delivery
- Warranty: 3 years extended
Negotiation Sequence:
- Volume Leverage: "100 units represents 10% of your annual Tamil Nadu sales"
- Market Expansion: "Partnership for 500+ units across Tamil Nadu in 3 years"
- Cash Advantage: "Immediate payment vs. typical 60-90 day collections"
- Competitive Pressure: "Three manufacturers offering 20%+ discounts"
Concession Strategy:
- Trade longer payment terms for better pricing
- Accept basic model variants for volume discount
- Commit to service contracts for equipment discount
- Offer brand promotion partnership for pricing
JCB Negotiations:
Leverage Points:
- Construction season timing pressure
- Multi-year purchase commitment potential
- Service contract bundling opportunity
- Regional dealer development partnership
Value Engineering Options:
- Standard vs. premium cabin options
- Tire specifications flexibility
- Hydraulic system variations
- Extended warranty vs. upfront discount
Drone Negotiations:
Unique Considerations:
- Technology obsolescence risk
- Pilot training value
- Software licensing terms
- Upgrade path commitments
5. Contract Terms & Conditions Template
A. Master Purchase Agreement Framework
PURCHASE AGREEMENT
Between: OX Agry Private Limited (Buyer)
And: [Supplier Name] (Seller)
ARTICLE 1: EQUIPMENT SPECIFICATIONS
1.1 Equipment Details: [As per RFQ specifications]
1.2 Quality Standards: [Industry standards + custom requirements]
1.3 Acceptance Criteria: [Inspection checklist]
1.4 Performance Guarantees: [Uptime, efficiency metrics]
ARTICLE 2: COMMERCIAL TERMS
2.1 Total Contract Value: ₹[Amount]
2.2 Unit Pricing: [Per equipment type]
2.3 Volume Discounts: [Discount structure]
2.4 Price Validity: [6 months from signing]
2.5 Currency: Indian Rupees only
ARTICLE 3: DELIVERY TERMS
3.1 Delivery Schedule: [Detailed timeline]
3.2 Delivery Location: OX Agry Facility, Palani
3.3 Transportation: Seller responsibility
3.4 Insurance: Comprehensive until delivery
3.5 Penalties: 0.5% per week delay (max 5%)
ARTICLE 4: PAYMENT TERMS
4.1 Advance Payment: 30% on PO confirmation
4.2 On Delivery: 60% on satisfactory delivery
4.3 Retention: 10% released after 30-day trial
4.4 Payment Method: RTGS/Wire transfer
4.5 Late Payment: 1.5% per month penalty
ARTICLE 5: WARRANTY & SUPPORT
5.1 Warranty Period: [As specified per equipment]
5.2 Service Coverage: Tamil Nadu region
5.3 Response Time: 24-hour service response
5.4 Parts Availability: 95% availability within 48 hours
5.5 Training: Operator training included
ARTICLE 6: RISK ALLOCATION
6.1 Force Majeure: Standard clause
6.2 Title Transfer: Upon full payment
6.3 Insurance: Comprehensive coverage required
6.4 Limitation of Liability: Capped at contract value
6.5 Indemnification: Mutual indemnification
ARTICLE 7: PERFORMANCE CLAUSES
7.1 Service Level Agreements:
- Equipment uptime: 95% minimum
- Service response: 24 hours maximum
- Parts delivery: 48 hours for critical items
7.2 Penalties for non-compliance:
- Uptime below 90%: 0.1% monthly discount
- Service delays: ₹5,000 per incident
7.3 Performance bonuses:
- 98%+ uptime: 0.5% annual bonus
- Zero service complaints: 1% bonus
B. Special Clauses for Large Volume Purchase
Volume Protection Clause:
"Seller guarantees buyer will receive most-favored-customer pricing.
If seller offers better terms to any customer for similar volume
within 12 months, buyer automatically receives those terms."
Technology Upgrade Clause:
"If seller launches significantly improved models within 24 months,
buyer has option to exchange up to 25% of fleet at 80% residual value."
Market Expansion Partnership:
"Seller agrees to support buyer's Tamil Nadu expansion with:
- Preferential pricing for additional 200+ units
- Joint marketing support worth ₹25 lakhs
- Dedicated service territory rights"
6. Financing & Payment Optimization
A. Payment Structure Options
Option 1: Conservative Cash Flow
Milestone | Payment % | Amount (₹ Cr) | Timing
------------------------|------------|---------------|--------
Purchase Order | 20% | 4.63 | Day 0
Manufacturing Complete | 30% | 6.94 | Month 1
Delivery & Inspection | 30% | 6.94 | Month 2-4
30-Day Trial Complete | 20% | 4.63 | Month 3-5
Total | 100% | 23.13 |
Option 2: Aggressive Discount Structure
Milestone | Payment % | Amount (₹ Cr) | Additional Discount
------------------------|------------|---------------|-------------------
Advance Payment | 50% | 11.56 | Extra 3% discount
Balance on Delivery | 50% | 11.56 | Standard terms
Total | 100% | 23.13 | ₹69 lakh savings
Option 3: Staggered Deployment
Batch | Equipment Mix | Value (₹ Cr) | Payment Terms
--------------|-------------------|--------------|---------------
Batch 1 (33%) | 33T+10H+10J+5D | 7.63 | 30% advance
Batch 2 (33%) | 33T+10H+10J+5D | 7.63 | 25% advance
Batch 3 (34%) | 34T+10H+10J+5D | 7.87 | 20% advance
Total | 100T+30H+30J+15D | 23.13 | Average 25%
B. Vendor Financing Options
Manufacturer Direct Financing:
Financing Partner | Interest Rate | Tenure | Processing Fee | Benefits
-------------------|---------------|--------|----------------|----------
Mahindra Finance | 10.5% | 5 years| 1% | Quick approval
TAFE Finance | 11.0% | 5 years| 0.5% | Flexible terms
JCB Finance | 11.5% | 4 years| 1.5% | Equipment-specific
Bank Partnership | 12.0% | 7 years| 2% | Lower rates
7. Quality Assurance & Inspection Framework
A. Pre-Delivery Inspection Checklist
Tractor Inspection Protocol:
VISUAL INSPECTION:
□ Paint quality and finish
□ Body alignment and fit
□ Tire condition and pressure
□ Fluid leaks check
□ Implement attachment points
FUNCTIONAL TESTING:
□ Engine start and idle quality
□ Transmission operation (all gears)
□ Hydraulic system pressure test
□ PTO engagement and operation
□ Steering and brake performance
DOCUMENTATION VERIFICATION:
□ Engine and chassis serial numbers
□ Warranty documentation
□ User manual and service schedule
□ Compliance certificates
□ Insurance transfer documents
PERFORMANCE VALIDATION:
□ Field operation test (2-hour minimum)
□ Fuel consumption measurement
□ Noise and vibration levels
□ Safety feature verification
□ Operator comfort assessment
Advanced Equipment Inspection:
HARVESTER SPECIFIC:
□ Cutting mechanism precision
□ Threshing efficiency test
□ Grain loss measurement
□ Cleaning system effectiveness
□ Grain tank and discharge
JCB SPECIFIC:
□ Hydraulic cycle time
□ Digging force measurement
□ Stability on slopes
□ Boom and bucket operation
□ Transmission performance
DRONE SPECIFIC:
□ Flight stability test
□ GPS accuracy verification
□ Spray pattern uniformity
□ Battery performance validation
□ Software functionality check
B. Acceptance Criteria Matrix:
Component | Acceptance Standard | Rejection Threshold | Action Required
-------------------|------------------------|--------------------|-----------------
Engine Performance | ±5% of rated power | >10% deviation | Replace/repair
Hydraulic Pressure | ±3% of specification | >5% deviation | System overhaul
Fuel Consumption | Within 10% of claimed | >15% variance | Engine tuning
Paint Quality | Industry standard | Visible defects | Refinishing
Documentation | 100% complete | Any missing items | Complete docs
8. Risk Management & Contingency Planning
A. Procurement Risk Assessment:
Risk Factor | Probability | Impact | Mitigation Strategy
--------------------------|-------------|--------|-----------------------
Supplier delivery delay | High (40%) | Medium | Multiple suppliers, penalties
Price escalation | Medium(30%) | High | Fixed price contracts
Quality issues | Low (15%) | High | Rigorous inspection, warranties
Technology obsolescence | Medium(25%) | Medium | Upgrade clauses, lease options
Supplier financial stress| Low (20%) | High | Financial health monitoring
Currency fluctuation | Low (10%) | Low | INR-only contracts
B. Contingency Strategies:
Supplier Default Protocol:
Timeline | Action Required | Responsibility
------------|-------------------------------|---------------
Day 1 | Activate backup supplier | Procurement Head
Day 3 | Negotiate emergency delivery | GM + Legal
Day 7 | Legal notice and penalties | Legal Team
Day 14 | Alternative sourcing decision | Board Review
Day 30 | Contract termination process | Full Management
Quality Failure Response:
Severity Level | Response Time | Action Required | Authority
---------------|---------------|------------------------|----------
Critical | Immediate | Stop all deliveries | GM
Major | 24 hours | Reject batch, repair | Ops Head
Minor | 72 hours | Conditional acceptance | Proc. Mgr
9. Implementation Timeline & Milestones
A. Procurement Phase Timeline (12 weeks):
Week | Activity | Deliverable | Owner
-----|--------------------------------|---------------------------|--------
1-2 | RFQ preparation & issuance | RFQ documents sent | Proc Team
3-4 | Supplier response collection | Technical proposals | Proc Team
5-6 | Evaluation & negotiation | Supplier scoring | Eval Committee
7-8 | Contract finalization | Signed agreements | Legal + GM
9-10 | Down payment & production | Production commenced | Finance
11-12| Quality assurance planning | Inspection protocols | QA Team
B. Key Milestones & Success Metrics:
Milestone | Target Date | Success Criteria | Risk Mitigation
---------------------------|-------------|--------------------------|----------------
RFQ Response Rate | Week 4 | 5+ responses per category| Industry outreach
Negotiation Success | Week 6 | 20%+ discount achieved | Multiple suppliers
Contract Execution | Week 8 | All agreements signed | Legal pre-approval
Production Commencement | Week 10 | Manufacturing started | Advance payments
Quality Framework Ready | Week 12 | Inspection teams ready | Third-party support
10. Budget & Resource Allocation
A. Procurement Phase Budget:
Activity | Duration | Resources | Cost (₹)
----------------------------|----------|-----------------|----------
RFQ Development | 2 weeks | Team + Legal | 1,50,000
Market Research | 2 weeks | Analyst + Expert| 2,00,000
Supplier Evaluation | 3 weeks | Committee + CA | 2,50,000
Contract Negotiation | 2 weeks | Legal + Expert | 3,00,000
Quality Framework Setup | 2 weeks | QA + Training | 2,00,000
Travel & Site Visits | 1 week | Team Travel | 1,50,000
Documentation & Legal | 1 week | Legal + Admin | 1,00,000
----------------------------|----------|-----------------|----------
TOTAL PHASE 3 BUDGET | 12 weeks | | 13,50,000
B. Resource Requirements:
- Procurement Team: 3 dedicated members
- Technical Committee: 5 evaluation experts
- Legal Support: Contract specialist
- Financial Analyst: Cost modeling expert
- Quality Assurance: 2 inspection specialists