BHEL looks to expand vendor base

Bharat Heavy Electricals Limited (BHEL) today said it is trying to develop different types of entrepreneurship vendors from various parts of the country for outsourcing its huge requirements, particularly of machining and foundry products.

The Tiruchirappally unit of BHEL, which used to outsource its requirements from 12 vendors for Rs 15 lakh in a year in 1970, has increased its vendor capacity to 600, procuring four lakh metric tonnes of components worth Rs 1,400 crore at present, Additional General Manager of the company TV Krishnan told reporters.

The company, which employed the vendors for converting the raw material given by it, has now shifted to Away Centre Fabrication mode, by which vendors themselves procure raw material and supply finished goods to the specification and drawing provided by the company, he said.

However, he added that since BHEL required a huge quantity of components, the vendor should have good financial support for working capital and a minimum work area.

Krishnan, who was here to discuss the participation in a subcontracting fair beginning from July 8, added that the company planned to expand vendor outsources in its Ranipet Unit.

Krishnan said vendors would be get their payment within 30 days of the delivery of the materials.

The vendors, he added, would also be protected for price variation in the products, due to price fluctuation of raw materials, particularly steel, since BHEL has entered into an MoU with Steel Authority of India Ltd for quarter price fixation, he said.

BHEL had recently floated an open tender for supply of
three lakh tonnes of material in the coming 18 months, Krishnan informed.

He said BHEL has promoted tiny sectors in and around its unit in Tiruchirapally by assisting 22 industries, adding that the company had also developed a cluster exclusively for women, who are doing a "good job" in supplying material to the company.