roject : Automobile

Submitted By:

Project – Solution for A

Decision Tree Tool:

Failure: Probability = 30%

Impact = $30K
Producing in-house Investment= $100K

Pass: Probability = 70%

Impact = $120K
Decision: Producing Electronic Auto Part
whether by in-house or outsourcing

Failure: Probability = 50%

Impact = $10K

Outsourcing Investment = $40K

Pass: Probability = 50%
Impact = $100K

Risk Exposure: Probability x Impact

Risk associated with Producing Inhouse: $100K - ($30K * 30%) + ($120K * 70%) = $175K

Risk associated with Outsourcing: $40K - ($10K * 50%) + ($100K * 50%) = $ 85K

Decision: The above Decision Tree helps us to understand that the “Risk associated” while
Outsourcing the activity of producing Electronic Auto Part is less compared to Producing Inhouse.
Hence decision has been taken to move with Outsourcing.
 Project – Solution for B
Procurement Management Plan:
Procurement Management Plan is the subsidiary plan which helps the companies, in outsourcing the
design & development of new or modifying the existing products or services.

INTRODUCTION/BACKGROUND
ABCD company wanted to upgrade their Cars with the latest technologies. As a part of this
upgradation project, ABCD company wanted to develop a special Electronic Auto Part. ABCD
company invites bid from suppliers as a part of Outsourcing Scheme and to encourage Partnering,
though the ABCD company has the capability to develop this part in-house.

SCOPE OF WORK
Scope shall contain the details of the Part to be procured as:
The scope of the work is to develop a special Electronic Auto Part, which will be used in Cars. The
vendor organization, should plan, design, develop, and hand over the Auto Parts to the client, ABCD.
Details of delivery are mentioned in the Procurement Phase section.

TIMELINE
The timeline of this project shall be specified clearly. Timeline shall also contains the project starts
on the date, when PO is released and ends as specified or agreed date/months. The vendor and the
client should mutually agree upon any extension of the timeline, and this has to be followed as per
the contract.

Vendor proposal shall contain a detailed phase wise activity and the timeline including the milestone
approvals from ABCD at the end of Concept Design, Detail Design Phase, Product Inspection and
Final Testing.

KEY MILESTONES
Following are the key milestones:
Kick off meeting Date …..
Design completion Date ……
User acceptance testing Date ……
Project closure Date ……

Roles & Responsibilities

Following are the key milestones:

SL. Name Contact Roles Responsibilities Communication

No
1 A YYYY Project Approve Procurement Kick-off Meeting
John Sponsor Management Plan Monthly Meetings
Approve vendor selection Quarterly Meetings
Approve any procurement
action in excess of $50,000
2 Kevin XXXX Project Provide oversight for all Kick-off Meeting
manager procurement actions Monthly Meetings
Approve procurement Quarterly Meetings
actions under $50,000 Daily Meetings
 Develop procurement
requirements
Manage vendor selection
process
Measure vendor
performance
Closing out vendor
contracts
3 Sachin SSSSSS Contracting Assist procurement actions Kick-off Meeting
Department by submitting requests for Quarterly Meetings
Director proposal (RFPs) to identified
vendors
Develop vendor contract
Assist in measuring vendor
performance
4 Dhoni DDDDD Project Assist in development of Monthly Meetings
team procurement requirements Daily Meetings
Assist in evaluating vendors

SPECIFIC REQUIREMENTS
Specific requirements expected to be fulfilled:
For the kickoff meeting, the client ABCD should be invited. Either the client or its representative will
attend the meeting. The meeting notice should be sent at least one week in advance.
The design document approval should be obtained from the client.
The user acceptance test cases shall be submitted to Customer for APPROVAL.
The status meeting has be conducted according to the communication management plan, specified
in the Section “Communication”.

Assumptions & Constraints:

Assumptions and Constraints on the project shall be clearly specified. Upon completing this, all
assumptions and constraints shall be treated as risk and prior approval shall be taken from the
concern Authority with detailed explanation and mitigation plan before ordering/awarding the
contract.

General Terms and Conditions:

I. Payments shall be made in XXX Currency.

II. Invoicing: Billing will be done end of each month, net 30 days
III. Taxes shall be as applicable.
IV. Detailed plan shall be submitted within 2 weeks after receipt of either Notice to
Proceed, Letter of Intent and/or Purchase Order.
V. Final approval on new product designs / concepts and selection of component will be
provided by ABCD company. Any delay in providing will affect the project schedule.

Decision Criteria:
Decision shall be taken based on the “Source Selection Criteria” as defined in the Section “Vendor
Selection Criteria”. Let it contain as a minimum of Years of Experience in the field, Experience in this
product line, Technical capabilities, Manufacturing & Testing Capabilities, capacity, etc.
 Vendor Selection Criteria:
Source Selection Criteria
The following Criteria shall be used while selecting the Vendor/supplier

1. The supplier should be with in India,

2. The production capacity of the firm should be 500 parts per month.
3. The organization should be certified for ISO 9001:2015.

Once the basic criteria are met, the organizations will be listed in below tables. The weighted average method is used to

Financial
Sl. Supplier Supplier Supplier Capability Production Product Technical Relevant Quality Delivery
Stability of
No Org Contact Location rating Capacity Cost Expertise Experience Rating Rating
Firm
Weights 15% 5% 10% 10% 5% 15% 20% 20%
1   ABC  12345  Chennai  3  3 1   1 2   1  2 2
 2  DEF  12346  Pune  2  1 2  2  3  1 3 3
 3  GHI  12347  Bangalore  1  2  3  3  1  2  2 2
 4  JKL  12348  Delhi  3  2  3  3  1  2  2 2
 5  MNO  12349  Mumbai  2 3   2 3   2  2 1 1
                       
Capacity and Capacity Rating

Sl. No Capacity Rating

1 500-1000 parts 3
2 1000-5000 parts 2
3 >5000 parts 1

Product Cost Rating

Sl. No Cost/ part Rating

1 > $50 3
2 $10- $50 2
3 < $10 1

Technical Expertise Rating

Sl. No Expertise Level Rating

1 Beginner 3
2 Intermediate 2
3 Expert 1

Relevant Experience Rating

Sl. No Experience Level Rating

1 <5 Years 3
2 5-15 Years 2
3 >15 Years 1

Financial Stability Rating

Sl. No Stability Rating

1 Unstable 3
2 Partially Stable 2
3 Stable 1

Quality and Delivery Rating (XXXX Rating Co)

Sl. No Quality Rating Rating

1 3 Star 3
2 4 Star 2
3 5 Star 1
 Project – Solution for C
Agreement:
AGREEMENT / PURCHASE ORDER

PO No Date of PO
Quotation Supplier Code Delivery
Date Date
Supplier Contact Person
Name
Address Contact Details
ABCD Email-ID
Contact
GST No.

Dear Sir/Madam,
Further to your quotation dated XX.YY.2018 we are pleased to release the PO for the following procurement.

Sl.No. Product Description Timeline Quantity (Pcs) Price ($)

1 Electronic Auto Part (Prototype – 1st Set) XX.XX.XXXX 50 3,33,333
2 Electronic Auto Part (Prototype – 2nd Set) XX.XX.XXXX 100 4,44,444
1 Electronic Auto Part (Prototype – 3rd Set) XX.XX.XXXX 500 8,88,888

Other Terms and conditions:

1. Payment Terms: Within 30 days from the date of invoice after the approval from the respective
project Managers. The invoice should be send to below address.

2. Taxes: At actuals at the time of invoicing. (GST18%)

3. The vendor/Consultant has to involve closely with ABCD’s point of contact to get all the required
inputs and all the efforts to be put to complete the Project on time.

4. All the agreed rates as mentioned above will remain firm and fixed for all purpose for the entire
contract period and no price escalation clause will be applicable. All the minor changes and
modifications during the project/Service execution to be absorbed in the above cost. However, incase
of any major change in the scope is involved the same needs to be mutually discussed and agreed.

5. General: All the terms and conditions attached along with the PO is applicable.

6. The vendor is requested to send us the acknowledgement of the receipt and acceptance of the PO.

For ABCD Private Limited

Contract Manager, ABCD

 Annexure:
TERMS & CONDITIONS

1. Delivery : In case the service/material ordered by ABCD Private Limited (the “Company”) under
the Purchase Order (PO) is not delivered within XXX months from the date of issue of the PO and / or
in case/s where no particular period is specified / prescribed in the PO, the PO will automatically
stand cancelled after the expiry of XXX months from the date of issue unless otherwise revised and /
or modified and in such a case, the Company shall not be liable for any costs and / or damages
incurred by the Vendor. Any production loss or customer rejections or other costs, charges,
expenses on account of delayed or defective material or material not conforming to specifications
supplied by the Vendor shall be to the Vendor’s account.

2. Quantity: Quantity of the material ordered under the PO must not exceed without the permission
of the Company being first obtained in writing. In case of excess quantity, no additional
consideration shall be payable, and all expenses, losses and charges shall be to the Vendor’s
account. The Vendor shall be solely responsible and liable to ensure supply of correct quantity of
material as per the specifications.

3.Statutory and Regulatory Compliance: The Company is an Environment, Health & Safety conscious
Company. Hence, all products supplied to the Company shall comply with all applicable statutory
and regulatory requirements and the Vendor shall keep the Company indemnified in this regard at
the Vendor’s cost and risk.

4.Warranty : The Vendor expressly warrants that all articles ordered to specifications shall confirm
thereto and to drawings, samples and other descriptions furnished by the Company or if not ordered
to specifications shall be fit and sufficient for the purposes intended and that all articles are of
merchantable and good quality and workmanship and free from defects.

5. Inspection: The material supplied by the Vendor shall be subjected to a final inspection and test at
the Company's plant at the Company’s discretion irrespective of any inspection conducted at the
Vendor's unit or the Vendor's subcontractor's unit. The Company reserves the sole right to reject any
good/s which is/are not as per their specifications or conditions. The rejected material shall be
removed at the expense of the Vendor including transportation both ways immediately after
notification of rejection by the Company to the Vendor.

6. Payments: In case the goods are received within the delivery schedule and inspected and found as
per specifications mentioned in the PO, all the payments shall be made to the Vendor from ABCD by
cheques payable at XYZ place only, if not otherwise stated.
 Project – Solution for D
Work Performance Data:
The raw observation and the measurements identified during the project activities as called Work
Performance Data.

Work Performance Information:

The data collected from various controlling process are being analyzed in context.

Work Performance Report:

The physical and electronic representation of the work performance information such as status
report, electronic dashboard and recommendation are part of Work Performance Reporting.
 WORK PERFORMANCE REPORT

PO No.:

Supplier Details:

Project No.:

Project Description:

Project Start Date:

Project Finish Date:

To be Distributed to: XXX, YYY, ZZZZ

Status Review Date:

Work Performance Data:

Actual work completed : 40%

Work supposed to be completed : 50%

Work Performance Information:

Schedule slippage = 10%

Reason / Remarks:

Reason for slippage shall be explained.

Risks:

Risks shall be covered in the Risk Register and mitigated.

Suggestions/Recommendations:

In this case, we can check for any activities that can be done in parallel and accordingly, “FAST
TRACKING” the schedule would be a right option to implement to catch up the schedule.

Authorities Sign:

Name, Designation & Seal

 Project – Solution for E
Control Procurement Management Technique:
Following are the Technique used in Control Procurement Processes:

1. Expert Judgement
2. Claims Administration
3. Data Analysis
a. Performance Review
b. Earned value analysis
c. Trend analysis
4. Inspection
5. Audit

Expert Judgement:
Experts should be considered from individuals or groups with specialized knowledge or trainings in
the following topics:

1. Relevant functional areas such as finance, engineering, design, development, supply chain
management, etc.
2. Laws, regulations, and compliance requirements; and
3. Claims administration.

Claims Administration:
Contested changes and potential constructive changes are those requested changes where the
buyer and seller cannot reach an agreement on compensation for the change or cannot agree that a
change has occurred. These contested changes are called claims. When they cannot be resolved,
they become disputes and finally appeals. Claims are documented, processed, monitored and
managed throughout the contract life cycle, usually in accordance with the terms of the contract. If
the parties themselves do not resolve a claim, it may have to be handled in accordance with
alternative dispute resolution (ADR) typically following procedures established in the contract.
Settlement of all claims and disputes through negotiation is the preferred method.

Data Analysis:
Data analysis techniques that can be used to monitor and control procurements include but are not
limited to:

a. Performance Reviews: Performance reviews for contracts measure, compare, and analyze
quality, resource, schedule, and cost performance against the agreement. This includes
identifying work packages that are ahead or behind schedule, over or under budget, or have
resource or quality issues.
 b. Earned Value Analysis (EVA): Schedule and cost variances along with schedule and cost
performance indexes are calculated to determine the degree of variance from target.
c. Trend Analysis: Trend analysis can develop a forecast estimate at completion (EAC) for cost
performance to see if performance is improving or deteriorating.

INSPECTION:
An inspection is a structured review of the work being performed by the contractor. This may
involve a simple review of the deliverables or an actual physical review of the work itself. On a
construction/engineering/infrastructure project, inspections involve walkthroughs of the site by
both the buyer and the contractor to ensure a mutual understanding of the work in progress.

AUDITS:
Audits are a structured review of the procurement process. Rights and obligations related to audits
should be described in the procurement contract. Resulting audit observations should be brought to
the attention of the buyer’s project manager and the seller’s project manager for adjustments to the
project, when necessary.