Railway Minister Suresh Prabhu. (PTI)

The Indian Railways will be launching digital contract, a system of digitisation of its entire supply chain across all zones. The step is aimed at improving the ease of doing business and transparency. With 100 per cent E-tenders and E-auctions already assimilated into the system, railways are further planning to build on these initiatives to achieve seamless flow of material, finances and information.

Digital contract, a seamlessly integrated digital supply chain, to be launched by Railway Minister Suresh Prabhu on April 11, envisages involving stakeholders including industries, financial institutions, internal customers of railways and inspecting agencies to create an efficient, responsive and transparent system.

The system includes digitisation of processes like bill submission, inspection, dispatches, receipt, bill passing and bill payments, warrantee monitoring and enabling use of analytics for increasing supply chain efficiencies in real time.

“Digitisation of supply chain should be seen as a tool for generating efficiencies, reducing entry barriers and transaction costs and increasing transparency,” said a senior Railway Ministry official.

Railways have a vast supply chain to maintain, sustain and build its huge asset base, to run the system, and to provide transportation service which is safe, secure and efficient. The supply chain of railways has a large number of stakeholders and involves huge recurring expenditure of the order of Rs 50,000 crore annually.

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This supply chain of railways generates large volumes of business and employment upstream, hence it is critical in railway functioning. Digitisation of processes can also help in linking budgets directly with the outcomes, a move government is focusing on, the official said.

Such digitization will enable use of analytics for decision-making, reduce inventories and reduce procurement cycle time leading to reduced cost of products/services. The railways have been stressing on the need for maximising use of ICT for increasing transparency and efficiency of government business processes on the one hand and improving ease of doing business on the other.

Railway Minister Suresh Prabhu had highlighted the commitment of the ministry in his budget speech 2016. “We intend to usher into a new era by switching over to paperless contract management system, where not only the bids are invited online but the entire process leading to award of a tender is also done electronically.We have completed the trial run for the above and intend to roll it out on all India basis in next financial year.”

Since paperless tender finalisation has been implemented and the entire process from publication of tenders to issue of acceptance letter is now digital we are going to launch digital contracting, which is resulting from digital and paperless decision making process, the official said.

The supply chain digitisation would encompass integration of information flows, physical flows, and financial flows between railways and its supply chain partners. It involves completely digitising the internal business processes of material supply chain and seamlessly integrating processes controlled by different stakeholders digitally to achieve a completely integrated, paperless and digitised supply chain.

The supply chain of Indian Railways is regulated through a single online website, which handles more than Rs 50,000 crore procurement through 100 per cent E-tenders annually.

The supply chain also handles more than Rs 2,500 crore auction sale through 100 per cent E-auctions in a year.

Besides, having more than 52,000 registered vendors for supplies, the vast supply chain handles more than 2,664 registered bidders for sale of scrap material.

This huge supply chain is managed from the headquarters of 17 zonal railways and 8 production units with more than 300 field locations spread across the length and breadth of the country.

Any transformational change in such a huge supply chain, requires innovative and out of the box solutions, while being within the public procurement systems.

In the last few years, the railways have substantially enhanced ICT for digitization of supply chain starting with e-tendering and e-auctions and moving towards paperless decision making process.

The railways’ journey towards digital supply chain is now moving towards complete supply chain digitization. Railways are holding a conference tomorrow which aims at creating a platform for different stakeholders to share their plans and ideas for identifying challenges and opportunities for achieving the vision of completely digitized supply chain.