Sagar Ispat India Pvt. Ltd. is a 35-year old manufacturer of cans and drums used for paint, food and other packaging utilities. They started their business as traders and ventured into manufacturing after earning a reasonable reputation in the market.
To manufacture their products, they need raw materials like tin plates, GP sheets and CRCAs which they buy from reputed businesses like Tata Steel and JSW.
The biggest problem they faced was the lack of funds owing to longer credit periods at the customer end, which delayed receiving the raw materials every month. And naturally, this delayed their manufacturing and packaging processes. Not only did they suffer from rejecting customer orders beyond a point due to the lack of working capital, their on-time order fulfillment rate was heading southward.
This recurring problem of inadequate liquid funds was slowing down their operation, making them always play the catch-up game.
In Bizongo they found an opportunity to break the shackles and meet their true growth potential. Now, they are able to meet the production timelines and order dispatch plan, thanks to the streamlined supplies from Tata Steel and JSW. This change is due to the early payments made by Bizongo to both Tata Steel and JWS.
In this way, Sagar Ispat need not block their working capital for procuring the materials. The cash on hand is instead used to process the customer orders in a timely manner.
In addition, with a new workflow driven by Bizongo's tech platforms, efficiency levels reached its peak for Sagar Ispat, giving the company enough ammunition to manage more orders in a given month.
The lead time is reduced and supplies from their vendors are just-in-time. That is not early, not late. If the supplies are made early, it occupies the factory's space as well as increases the inventory carrying costs. If they are made late, as mentioned earlier, it affects production and order dispatch planning leading eventually to loss of business.
Operating on a just-in-time inventory model is a dream for any MSME, and Sagar Ispat is one example of an enterprise that is reaping its benefits.
Bizongo's tech-led vendor financing created a big impact on two fronts - efficiency and turnover.
Let us discuss the efficiency impact first.
Bizongo's tech platforms made the PO processes extremely easy for Sagar Ispat. They were able to raise a PO on the platform in a few minutes, while vendors approved it with a single click. With invoicing errors almost eliminated, thanks to e-invoicing, there were hardly any follow-ups required for correction. This along with the integrated ProcureLive and PartnerHub platforms, ensured there was very little communication with the vendors via emails or phone calls.
Thus, Sagar Ispat digitized their entire buying process and thereby increased their operational efficiencies.
With a stronger working capital, they grew their monthly sales by 43% in just 6 months!!
Ever since they availed Bizongo’s tech-based and vendor financing solutions, they are able to see surplus cash in the bank that they can put to use to grow their business. As a result of this, Sagar Ispat started construction in full swing for their new manufacturing unit.
The growth in revenue also meant more self-sufficiency w.r.t financing big projects. This confidence in self-financing is a result of a more streamlined operation.
Bizongo's partnership thus proved to be a turning point for a medium-sized business like Sagar Ispat.